Washington apple crop estimate nears record

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The estimated size of Washington’s 2017 apple crop grew for the second month in a row. Smaller crops in Europe and elsewhere could boost Washington exports and help grower returns.

CAPITAL PRESS – DAN WHEAT – WENATCHEE, Wash. — The Washington apple crop estimate continues to grow, putting downward pressure on prices, but an industry expert says that could be countered by improved exports.

The Washington State Tree Fruit Association now estimates the crop at 142.3 million, 40-pound boxes, up 8.7 percent from the Aug. 1 forecast and second only to the record 143.6 million boxes of 2014. That was a year of poor grower returns, but this year likely will be helped as light crops in Europe and elsewhere fuel overseas demand for Washington apples.

The large crop “means marginal downward pressure on prices but exports are doing well, and if that continues it will really help,” said Desmond O’Rourke, retired Washington State University agricultural economist and world apple market analyst.

A substantial part of the crop is Red Delicious, which Asian countries like, O’Rourke said. Nonetheless, marketers will struggle to maintain current prices for the next couple of months, he said. Prices have slid some in the last month or two, typical after being higher in August at the start of harvest.

“The wild card is how soon will the European crop wind down. They’ve had a much smaller crop and that will shift exports our way,” said Tom Riggan, general manager of Chelan Fresh Marketing, one of the state’s leading sales desks.

The shift will come in January and already European and Middle East customers are inquiring more about Washington apple availability and prices than they typically do this time of year, Riggan said.

“That tells us supply is tight over there. One customer wanted a certain volume and price and we said we needed another price. They came back a week later and were OK with it,” he said.

Exports got off to a slow start because this year’s crop was later than those of the last two years, O’Rourke said. As of Dec. 1, the industry had exported 8.3 million boxes of apples compared to 8.8 million at the same point a year ago. But the pace is picking up with good movement to Mexico and India, he said.

Season-to-date, domestic and export shipments totaled 29.6 million boxes as of Dec. 1. That’s 20.8 percent shipped this year versus 25.6 percent a year ago.

There’s already significant pressure on Red Delicious and Gala prices. Pressure will increase on Granny Smith, Honeycrisp and Fuji due to large volumes, O’Rourke said.

The Dec. 1 estimate shows 34.4 million boxes of Red Delicious, 32.8 million of Gala, 20.9 million of Granny Smith, 18.7 million of Fuji, 11.9 million of Honeycrisp, 7.7 million of Golden Delicious, 5.4 million of Cripps Pink, 1.8 million of Ambrosia, 1.3 million of Braeburn and 504,000 of Jonagold. The rest of the crop consists of minor varieties and a growing amount of proprietary varieties.

The estimates for Gala, Granny, Honeycrisp and Ambrosia would be record highs. The estimates for Fuji and Cripps Pink are the second highest, O’Rourke said.

The Granny Smith volume is OK because there is tremendous demand and movement domestically and overseas, Riggan said. Prices will stabilize at the end of January and climb a little as the crop shrinks, he said.

Good weather allowed harvest to run to the end of November with some marginally profitable apples left on trees due to not enough pickers, Riggan said.

The national fresh crop on hand Dec. 1 was 131.1 million, 42-pound boxes, 9 percent more than the previous year. The total fresh and processing crop was 182.5 million boxes, up 12 percent from last year and 18 percent from the five-year average for that date, according to the U.S. Apple Association.

The larger national inventory pressures prices, but the smaller crops in Europe, Mexico and Canada help, O’Rourke said.

Washington growers are barely breaking even on Reds, Gala, Goldens, Braeburn, Cameo and Jonagold and making money on Honeycrisp, Granny, Fuji and proprietary varieties, he said.

“Overall, it will be a breakeven year on profitability for growers unless they have premium varieties,” O’Rourke said. “Integrated companies will have more packing and marketing fees with a larger crop so they will do OK, but they have big investments on new orchards.”

As of Dec. 8, USDA tracking of average asking prices among Yakima and Wenatchee shippers for extra fancy (standard grade) medium size 80 and 88 apples per packed box: $14 to $17 for Red Delicious, basically unchanged from November and October; Gala was $18 to $24 on 80s, down from $20 to $26 a month ago and $24 to $28 two months ago; Gala was $16 to $22 on 88s, stable from a month ago and down from $22 to $26 two months ago.

Generally, $17 to $18 per box is breakeven on major varieties.

Honeycrisp was $44 to $52, mostly $48 to $52, on premium 80s and 88s, down from $54 to $62 for both a month ago and $70 to $76 for premium 80s two months ago and $65 to $75 for premium 88s two months ago.

Granny Smith was $34 to $38 for 80s, down from $36 to $40 a month ago, and was $28 to $34 for 88s, down from $32 to $38 for 88s a month ago. They were $42 to $46 for 80s and $40 to $44 for 88s two months ago.

Fuji was $24 to $28 for 80s and $22 to $26 for 88s, down from $26 to $30 for both a month ago.

Golden Delicious was $24 to $28, close to the same as a month ago but down from $30 to $34 two months ago.

Dan Wheat

Capital Press – Published on December 12, 2017 8:45AM

Photo: Getty Images